Microsoft chief executive Steve Ballmer will receive only half his available bonus this year owing to the company's failings in the mobile space.
A filing with the Securities and Exchange Commission reveals that Ballmer will receive $670,000 (£422,665) in bonuses out of a possible $1.34m (£845,575).
The Microsoft board members decided to withhold the full amount because of the "unsuccessful launch of the Kin phone [and] loss of market share in the company's mobile phone business".
Microsoft dropped the Kin phones just three months after launch, before any of the devices even made it on to the European market.
On a more positive side, the filing explains that Ballmer had successfully led the company to a strong overall performance.
"Microsoft reported a record $62.5bn [£39.4bn] in revenue and $24.1bn [£15.2bn] in operating income, [and] a series of successful product launches including Windows 7, Office 2010, Bing, Windows Server and SQL Server," it said.
The board also noted Ballmer's work in pursing new innovations that will " position the company to lead the transformation to the cloud", with products such as Azure and Office Web Apps.
Ballmer's overall earnings came to $1.35m (£851,660), up from $.1.27m (£801,192) last year, and other key executives also saw their pay rise on the back of the firm's successful year.
Chief operating officer Kevin Turner picked up $7.9m (£4.9m) with bonuses of $2m (£1.26m) and stock options of $5.3m (£3.3m), while Robbie Bach, president of the entertainment and devices division, earned $7.3m (£4.6m).
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